ATM
An automated teller machine (ATM) is an electronic telecommunications device that enables customers of financial institutions to perform financial transactions, such as cash withdrawals, deposits, funds transfers, balance inquiries or account information inquiries, at any time and without the need for direct interaction with bank staff.
ATMs are known by a variety of names, including automatic teller machine (ATM) in the United States[1][2][3] (sometimes redundantly as "ATM machine")....
Using an ATM, customers can access their bank deposit or credit accounts in order to make a variety of financial transactions, most notably cash withdrawals and balance checking, as well as transferring credit to and from mobile phones. ATMs can also be used to withdraw cash in a foreign country. If the currency being withdrawn from the ATM is different from that in which the bank account is denominated, the money will be converted at the financial institution's exchange rate.[10]
Customers are typically identified by inserting a plastic ATM card (or some other acceptable payment card) into the ATM, with authentication being by the customer entering a personal identification number (PIN), which must match the PIN stored in the chip on the card (if the card is so equipped), or in the issuing financial institution's database.
According to the ATM Industry Association (ATMIA), as of 2015, there were close to 3.5 million ATMs installed worldwide.[11][12] However, the use of ATMs is gradually declining with the increase in cashless payment systems.[13]
History
An old Nixdorf ATM
The idea of out-of-hours cash distribution developed from bankers' needs in Japan, Sweden, and the United Kingdom.[14][15][16]
In 1960 Luther George Simjian invented an automated deposit machine (accepting coins, cash and cheques) although it did not have cash dispensing features.[17] His US patent was first filed on 30 June 1960 and granted on 26 February 1963.... An experimental Bankograph was installed in New York City in 1961 by the City Bank of New York, but removed after six months due to the lack of customer acceptance.[20]
In 1962 Adrian Ashfield invented the idea of a card system to securely identify a user and control and monitor the dispensing of goods or services. This was granted UK Patent 959,713 in June 1964 and assigned to Kins Developments Limited.[21]
A Japanese device called the "Computer Loan Machine" supplied cash as a three-month loan at 5% p.a. after inserting a credit card. The device was operational in 1966.[22][23] However, little is known about the device.[14]
Actor Reg Varney using the world's first cash machine in Enfield Town, north London on 27 June 1967
A cash machine was put into use by Barclays Bank in its Enfield Town branch in North London, United Kingdom, on 27 June 1967.[24] This machine was inaugurated by English comedy actor Reg Varney.[25] This instance of the invention is credited to the engineering team led by John Shepherd-Barron of printing firm De La Rue,[26] who was awarded an OBE in the 2005 New Year Honours.[27][28]
Transactions were initiated by inserting paper cheques issued by a teller or cashier, marked with carbon-14 for machine readability and security, which in a later model were matched with a four-digit personal identification number (PIN).[26][29] Shepherd-Barron stated "It struck me there must be a way I could get my own money, anywhere in the world or the UK. I hit upon the idea of a chocolate bar dispenser, but replacing chocolate with cash."[26]
The Barclays–De La Rue machine (called De La Rue Automatic Cash System or DACS)[30] beat the Swedish saving banks' and a company called Metior's machine (a device called Bankomat) by a mere nine days and Westminster Bank's–Smith Industries–Chubb system (called Chubb MD2) by a month.[31] The online version of the Swedish machine is listed to have been operational on 6 May 1968, while claiming to be the first online ATM in the world, ahead of similar claims by IBM and Lloyds Bank in 1971,[32] and Oki in 1970.[33]
The collaboration of a small start-up called Speytec and Midland Bank developed a fourth machine which was marketed after 1969 in Europe and the US by the Burroughs Corporation. The patent for this device (GB1329964) was filed in September 1969 (and granted in 1973) by John David Edwards, Leonard Perkins, John Henry Donald, Peter Lee Chappell, Sean Benjamin Newcombe, and Malcom David Roe.
Both the DACS and MD2 accepted only a single-use token or voucher which was retained by the machine, while the Speytec worked with a card with a magnetic stripe at the back. They used principles including Carbon-14 and low-coercivity magnetism in order to make fraud more difficult.
The idea of a PIN stored on the card was developed by a group of engineers working at Smiths Group on the Chubb MD2 in 1965 and which has been credited to James Goodfellow[34] (patent GB1197183 filed on 2 May 1966 with Anthony Davies). The essence of this system was that it enabled the verification of the customer with the debited account without human intervention. This patent is also the earliest instance of a complete "currency dispenser system" in the patent record. This patent was filed on 5 March 1968 in the US (US 3543904) and granted on 1 December 1970. It had a profound influence on the industry as a whole. Not only did future entrants into the cash dispenser market such as NCR Corporation and IBM licence Goodfellow's PIN system, but a number of later patents reference this patent as "Prior Art Device".[35]
Propagation[]
Devices designed by British (i.e. Chubb, De La Rue) and Swedish (i.e. Asea Meteor) quickly spread out. For example, given its link with Barclays, Bank of Scotland deployed a DACS in 1968 under the 'Scotcash' brand. Customers were given personal code numbers to activate the machines, similar to the modern PIN. They were also supplied with £10 vouchers. These were fed into the machine, and the corresponding amount debited from the customer's account....
Docutel in the United States
After looking firsthand at the experiences in Europe, in 1968 the ATM was pioneered in the U.S. by Donald Wetzel, who was a department head at a company called Docutel.[28] Docutel was a subsidiary of Recognition Equipment Inc of Dallas, Texas, which was producing optical scanning equipment and had instructed Docutel to explore automated baggage handling and automated gasoline pumps.[38]
On 2 September 1969, Chemical Bank installed a prototype ATM in the U.S. at its branch in Rockville Centre, New York. The first ATMs were designed to dispense a fixed amount of cash when a user inserted a specially coded card.[39] A Chemical Bank advertisement boasted "On Sept. 2 our bank will open at 9:00 and never close again."[40] Chemical's ATM, initially known as a Docuteller was designed by Donald Wetzel and his company Docutel. Chemical executives were initially hesitant about the electronic banking transition given the high cost of the early machines. Additionally, executives were concerned that customers would resist having machines handling their money.[41] In 1995, the Smithsonian National Museum of American History recognised Docutel and Wetzel as the inventors of the networked ATM.[42] ...
Further Advances
In April 1971, Busicom began to manufacture ATMs based on the first commercial microprocessor, the Intel 4004. Busicom manufactured these microprocessor-based automated teller machines for several buyers, with NCR Corporation as the main customer.[44]
**Mohamed Atalla invented the first hardware security module (HSM),[45] dubbed the "Atalla Box", a security system which encrypted PIN and ATM messages, and protected offline devices with an un-guessable PIN-generating key.[46] In March 1972, Atalla filed U.S. Patent 3,938,091 for his PIN verification system, which included an encoded card reader and described a system that utilized encryption techniques to assure telephone link security while entering personal ID information that was transmitted to a remote location for verification.[47]
He founded Atalla Corporation (now Utimaco Atalla) in 1972,[48] and commercially launched the "Atalla Box" in 1973.[46] The product was released as the Identikey. It was a card reader and customer identification system, providing a terminal with plastic card and PIN capabilities. The Identikey system consisted of a card reader console, two customer PIN pads, intelligent controller and built-in electronic interface package.[49]
The device consisted of two keypads, one for the customer and one for the teller. It allowed the customer to type in a secret code, which is transformed by the device, using a microprocessor, into another code for the teller.[50] During a transaction, the customer's account number was read by the card reader. This process replaced manual entry and avoided possible key stroke errors. It allowed users to replace traditional customer verification methods such as signature verification and test questions with a secure PIN system.[49] The success of the "Atalla Box" led to the wide adoption of hardware security modules in ATMs.[51] Its PIN verification process was similar to the later IBM 3624.[52] Atalla's HSM products protect 250 million card transactions every day as of 2013,[48] and secure the majority of the world's ATM transactions as of 2014.[45]...
Found on Navy and cruise ships...In recent times, countries like India and some countries in Africa are installing solar-powered ATMs in rural areas.[57]
The world's highest ATM is located at the Khunjerab Pass in Pakistan. Installed at an elevation of 4,693 metres (15,397 ft) by the National Bank of Pakistan, it is designed to work in temperatures as low as -40-degree Celsius.[58]...Estimates developed by ATMIA place the number of ATMs currently in use at 3 million units, or approximately 1 ATM per 3,000 people in the world.[61][62]...
The number of human bank tellers in the United States increased from approximately 300,000 in 1970 to approximately 600,000 in 2010. Counter-intuitively, a contributing factor may be the introduction of automated teller machines. ATMs let a branch operate with fewer tellers, making it cheaper for banks to open more branches. This likely resulted in more tellers being hired to handle non-automated tasks, but further automation and online banking may reverse this increase.[82]